Endeavor Makes Last-Minute Call to Yank IPO as Conditions Sour

(Bloomberg) -- In a last-minute decision befitting a Hollywood thriller, Endeavor Group Holdings Inc. called off its $405 million initial public offering late Thursday, hours before the stock was set to begin trading.

The talent agency and entertainment conglomerate -- run by media mogul Ari Emanuel -- decided to postpone the stock sale after an IPO flop by Peloton Interactive Inc. on Thursday. Endeavor’s offering now won’t happen until next year at the earliest, according to a person familiar with the matter. Endeavor had already reduced the size and price before ultimately deciding to pull the listing.

The move is the latest sign that the IPO market is souring. Peloton, the marker of high-end fitness bikes, fell as much as 15% below its offering price on their first day of trading Thursday. Earlier this month, WeWork, a once-hot co-working space startup, had to put its IPO plans on hold when potential investors balked at the valuation it was seeking.

Ride-sharing companies Uber Technologies Inc. and Lyft Inc. also had lackluster showings when they went public in the first half of the year, which set a somber tone for other private companies looking to test the waters.

Endeavor had been trying to sell its shares right until it decided to pull the IPO shortly after the markets closed Thursday, people familiar with the situation said. Its bankers and executives had been monitoring the rocky performance of Peloton throughout the day and felt that market conditions were too uncertain, they said.

“Endeavor will continue to evaluate the timing for the proposed offering as market conditions develop,” the company said.

Peloton was the third-worst U.S. IPO in 10 years for companies that raised at least $1 billion, according to data compiled by Bloomberg.

Entertainment Empire

Endeavor’s IPO was meant to culminate decades of work by Emanuel, an agent who has represented many of the biggest names in Hollywood, sports and corporate America. He’s the brother of former Chicago Mayor Rahm Emanuel and esteemed doctor Ezekiel Emanuel. He was also the inspiration for Ari Gold, the foul-mouthed agent on HBO’s “Entourage,” which was produced by Emanuel client Mark Wahlberg.

In recent years, Emanuel and Executive Chairman Patrick Whitesell have transformed Endeavor from a boutique talent agency into a multipronged media giant that runs sports leagues, hosts fashion events and represents leading athletes as well as entertainers. Endeavor’s clients have included Dwayne Johnson, tennis star Maria Sharapova and celebrity chef Bobby Flay.

In 2016, it led a group that bought Ultimate Fighting Championship, the world’s biggest mixed-martial arts match promoter, for $4 billion. Talent representation now accounts for less than half of its revenue.

The offering was led by Goldman Sachs Group Inc., KKR & Co., JPMorgan Chase & Co., Morgan Stanley and Deutsche Bank AG. The company also was backed by private equity firm Silver Lake. The shares had been slated to trade on the New York Stock Exchange under the symbol EDR.

Endeavor, based in Beverly Hills, California, had previously been seeking to raise as much as $619 million before it had to scale back its plans.

After the IPO was pulled, Emanuel sent an email informing employees of the decision.

“Unfavorable market conditions have negatively impacted overall IPO investor sentiment,” the 58-year-old said in the note. “While I know this may be disappointing, we’re not willing to undervalue our company.”

The Endeavor team has “good stewards of capital,” he said. “We will continue measuring our success over the long term and doing great work for our clients, business partners and owned assets.”

To contact the reporters on this story: Crystal Tse in New York at ctse44@bloomberg.net;Liana Baker in New York at lbaker75@bloomberg.net;Lucas Shaw in Los Angeles at lshaw31@bloomberg.net

To contact the editors responsible for this story: Liana Baker at lbaker75@bloomberg.net, Matthew Monks

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